UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): August 1, 2018
 
Univar Inc.
(Exact name of registrant as specified in its charter)

 

					
 	 	 	 	 	
Delaware	 	001-37443	 	26-1251958	
(State or other jurisdiction
of incorporation)	 	(Commission
File Number)	 	(I.R.S Employer
Identification No.)	
 	 	
3075 Highland Parkway, Suite 200
Downers Grove, IL 60515	
(Address of principal executive offices, including zip code)	

Registrant’s telephone number, including area code: (331) 777-6000

Not Applicable
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

¨ Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

	
		
Item 2.02	Results of Operations and Financial Condition	
On August 1, 2018 , Univar Inc. (the “Company”) announced its consolidated financial results for the quarter ended June 30, 2018 . A copy of the Company’s press release and related presentation are furnished herewith on Form 8-K as Exhibits 99.1 and 99.2, respectively. The information contained in Item 2.02, including Exhibit 99.1 and Exhibit 99.2, of this report on Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and it will not be incorporated by reference into any registration statement or other document filed by the Company under the Securities Act of 1933, as amended, or the Exchange Act except as expressly set forth by specific reference in such a filing.

	
		
Item 9.01	Financial Statements and Exhibits	
(d) Exhibits

			
 	 	 	
Exhibit
Number	  	Description	
 	 	 	
99.1	  	Univar Inc. Press Release dated August 1, 2018	
99.2	 	Univar Inc. Fiscal Second Quarter 2018 Earnings Presentation dated August 1, 2018	

SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	

Date: August 1, 2018	 	 	 	Univar Inc.	
 	 	 	 	
 	 	 	 	By:	 	/s/ Jeffrey W. Carr	
 	 	 	 	Name:	 	Jeffrey W. Carr	
 	 	 	 	Title:	 	Senior Vice President, General Counsel and Secretary	

PRESS RELEASE

	
	
FOR ADDITIONAL INFORMATION:	
Investor Relations	
David Lim	
+1 844-632-1060	
IR@univar.com	

Univar Reports 2018 Second Quarter Financial Results
Improved sales force execution and diligent cost management deliver near double-
digit Adjusted EBITDA growth; Gross margin and Adjusted EBITDA margin increased;
Gross profit grew in all business segments

Second Quarter 2018 Highlights

•	Univar reported net income of $56.1 million , or $0.40 per share, compared to $31.3 million , or $0.22 per share in the prior year second quarter.	

•	Adjusted earnings per share grew 17.5 percent to $0.47 per share from $0.40 per share in the prior year second quarter.	

•	Adjusted EBITDA grew 9.2 percent to $173.1 million driven by solid core business performance and strong operating leverage.	

•	USA sales increased 10.0 percent, driven by improved sales force execution, chemical price inflation and volume growth.	

•	Univar's leverage ratio was reduced to 4.0x from 4.7x at June 30, 2017, reflecting growth in Adjusted EBITDA and a $143 million reduction in net debt.	

•	Full year guidance reaffirmed at low double digit growth in Adjusted EBITDA, and Adjusted earnings per share of $1.65 to $1.85.	

DOWNERS GROVE, Ill. – August 1, 2018 – Univar Inc. (NYSE: UNVR) (“Univar”), a global chemical and ingredients distributor and provider of value-added services, announced today its financial results for the second quarter ended June 30, 2018 .

Univar reported net income of $56.1 million , or $0.40 per share, compared to net income of $31.3 million , or $0.22 per share, in the second quarter of 2017. Adjusted earnings per share increased 17.5 percent to $0.47 per share from $0.40 per share in the prior year second quarter.

Adjusted EBITDA grew 9.2 percent to $173.1 million from $158.5 million in the second quarter last year and Adjusted EBITDA margin expanded 20 basis points to 7.3 percent reflecting higher gross margin, effective cost management and operating leverage.

Consolidated sales increased 5.6 percent while gross profit grew 7.3 percent to $500.5 million largely due to improvements in the Company's sales force effectiveness and favorable change in product and market mix. Gross profit grew across all segments.

“Our strategy is working, our global execution is improving,” said David Jukes, president and chief executive officer. "The investment in our sales force effectiveness is showing improved results across all of our regions during the second quarter and we continue to receive more product authorizations from our supplier partners, both of which position us well for future growth. We delivered strong growth in both the EMEA and Latin America regions, and the pace of our USA transformation continues to accelerate. Our entire company is energized to maintain our momentum as we enter the second half of the year."

"Disciplined cost management and productivity gains enabled us to lower our operating expenses as a percentage of sales in the second quarter, while making targeted investments in our business for growth,” added Carl Lukach, executive vice president and chief financial officer. “Strong organizational focus on managing our cash flow allowed us to pay down additional debt and further strengthen our balance sheet."

Company Performance
The results of Univar's operating performance are described below and, unless otherwise indicated, are a comparison of second quarter 2018 results with second quarter 2017 results, including Adjusted EBITDA, which is reconciled to reported net income in the accompanying supplemental financial information.

	
																			
 	 	(Unaudited)	 	 	 	 	 	 	
 	 	Three months ended June 30,	 	 	 	 	 	% change	
(in millions)	 	2018	 	2017	 	$ change	 	% change	 	excl. currency	
 	 	 	 	 	 	 	 	 	 	 	
External Net Sales	 	 	 	 	 	 	 	 	 	 	
USA	 	$	1,309.8		 	$	1,191.1		 	$	118.7		 	10.0	 %	 	10.0	 %	
Canada	 	450.9		 	492.4		 	(41.5	)	 	(8.4	)%	 	(12.1	)%	
EMEA	 	511.9		 	463.7		 	48.2		 	10.4	 %	 	3.7	 %	
Rest of World	 	100.0		 	99.8		 	0.2		 	0.2	 %	 	5.4	 %	
Total Consolidated Net Sales	 	$	2,372.6		 	$	2,247.0		 	$	125.6		 	5.6	 %	 	3.6	 %	
 	 	 	 	 	 	 	 	 	 	 	
Gross Profit	 	 	 	 	 	 	 	 	 	 	
USA	 	$	290.8		 	$	275.7		 	$	15.1		 	5.5	 %	 	5.5	 %	
Canada	 	68.9		 	67.5		 	1.4		 	2.1	 %	 	(1.9	)%	
EMEA	 	118.2		 	104.7		 	13.5		 	12.9	 %	 	5.7	 %	
Rest of World	 	22.6		 	18.5		 	4.1		 	22.2	 %	 	30.3	 %	
Total Consolidated Gross Profit	 	$	500.5		 	$	466.4		 	$	34.1		 	7.3	 %	 	5.4	 %	
 	 	 	 	 	 	 	 	 	 	 	
Adjusted EBITDA	 	 	 	 	 	 	 	 	 	 	
USA	 	$	97.2		 	$	91.8		 	$	5.4		 	5.9	 %	 	5.9	 %	
Canada	 	34.6		 	36.5		 	(1.9	)	 	(5.2	)%	 	(8.8	)%	
EMEA	 	40.1		 	34.2		 	5.9		 	17.3	 %	 	10.5	 %	
Rest of World	 	9.1		 	4.9		 	4.2		 	85.7	 %	 	98.0	 %	
Other*	 	(7.9	)	 	(8.9	)	 	1.0		 	11.2	 %	 	11.2	 %	
Total Consolidated Adjusted EBITDA	 	$	173.1		 	$	158.5		 	$	14.6		 	9.2	 %	 	7.3	 %	
* Other represents unallocated corporate costs that do not directly benefit segments.

Segment Highlights

USA – Adjusted EBITDA increased 5.9 percent to $97.2 million , the sixth consecutive quarter of growth, reflecting strong operating leverage. USA segment sales grew 10.0 percent as a result of improved sales force execution, chemical price inflation and higher volumes. Gross profit grew 5.5 percent on slightly lower margins, reflecting strong industrial demand in bulk commodity chemicals which resulted in a higher mix of bulk commodity chemical sales compared to last year.

Canada – Strong double digit growth in Industrial Chemicals Adjusted EBITDA was offset by soft agriculture demand due to weather impacts resulting in Adjusted EBITDA of $34.6 million . Gross margin increased 160  basis points to 15.3  percent while Adjusted EBITDA margin expanded 30 basis points to 7.7 percent, reflecting strength in key growth markets such as coatings and personal care, and improving sales force execution in Industrial Chemicals.

EMEA – Adjusted EBITDA increased 17.3 percent to $40.1 million due to double digit growth in Focused Industries, favorable mix and improved sales force execution. Gross margin increased 50 basis points to 23.1 percent and Adjusted EBITDA margin expanded 40 basis points to 7.8 percent, driven by mix improvement and strong cost management.

Rest of World – Adjusted EBITDA grew $ 4.2 million , or 85.7 percent to $9.1 million driven by strong performance in both Brazil and Mexico along with increasing profitability in Asia Pacific. Higher margins and an improved geographical mix in Latin America, along with contributions from the Tagma acquisition, led to an increase in profitability. Gross margin increased 410 basis points to 22.6 percent and Adjusted EBITDA margin expanded 420 basis points to 9.1 percent.

Outlook

The Company continues to make progress against its strategic growth plan and 2021 financial targets. For the full year 2018, Univar remains on track to deliver low double digit growth in Adjusted EBITDA, and Adjusted earnings per share in the range of $1.65 and $1.85.

For the third quarter of 2018, Univar expects low double digit Adjusted EBITDA growth.

Univar to Host Webcast on August 1, 2018 at 9:00 a.m. EDT

The Company will host a webcast with investors to discuss the second quarter results at 9:00 a.m. ET on August 1, 2018 , which can be accessed on the Investor Relations section of its website at http://investor.univar.com . Following the event, an archived version of the webcast and supporting materials will be available on the same website.

Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income, Adjusted earnings per share

The Company monitors the results of its operating segments separately for the purposes of making decisions about resource allocation and performance assessment. The Company evaluates performance on the basis of Adjusted EBITDA, which it defines as its consolidated net income (loss), plus the sum of interest expense, net of interest income, income tax expense (benefit), depreciation, amortization, other operating expenses, net (which primarily consists of employee stock-based compensation expense, restructuring charges, other employee termination costs, business optimization, acquisition and integration related expenses, and other unusual or non-recurring expenses), loss on extinguishment of debt and other (expense) income, net (which consists of gains (losses) on foreign currency transactions and undesignated derivative instruments, debt amendment costs, non-operating retirement benefits, and other non-operating activity). Adjusted EBITDA margin is Adjusted EBITDA as a percentage of net sales. Adjusted EBITDA conversion ratio is Adjusted EBITDA as a percentage of Gross Profit. The Company believes that Adjusted EBITDA is an important indicator of operating performance because:

•	The Company reports Adjusted EBITDA to its lenders as required under the covenants of its credit agreements;	
		
•	The Company considers gains (losses) on the acquisition, disposal and impairment of assets as resulting from investing decisions rather than ongoing operations;	
		
•	Adjusted EBITDA excludes the effects of income taxes, as well as the effects of financing and investing activities by eliminating the effects of interest, depreciation and amortization expenses and therefore more closely measures our operational performance;	
		
•	The Company uses Adjusted EBITDA in setting performance incentive targets in order to align performance measurement with operational performance; and	
		
•	Other significant items, while periodically affecting the Company’s results, may vary significantly from period to period and have a disproportionate effect in a given period, which affects comparability of its results.	

The Company has incorporated an Adjusted net income and Adjusted earnings per share metric as a complementary metric to GAAP earnings per share to provide additional transparency to ongoing performance. Adjusted net income excludes the same items as Adjusted EBITDA, except for stock-based compensation expense and non-operating retirement benefits.

Use of Non-GAAP Measures

The Company’s management believes that certain financial measures that do not comply with accounting principles generally accepted in the United States (“GAAP”) provide relevant and meaningful information concerning the ongoing operating results of the Company. Such non-GAAP financial measures are used from time to time herein but should not be viewed as a substitute for GAAP measures of performance. Reconciliations of non-GAAP measures to GAAP are provided in Schedules A and D.

About Univar 
Founded in 1924, Univar (NYSE: UNVR) is a global chemical and ingredients distributor and provider of value-added services, working with leading suppliers worldwide. Supported by a comprehensive team of sales and technical professionals with deep specialty and market expertise, Univar operates hundreds of distribution facilities throughout North America, Western Europe, Asia-Pacific and Latin America. Univar delivers tailored customer solutions through a broad product and services portfolio sustained by one of the most extensive industry distribution networks in the world. For more information, visit www.univar.com.

Forward-Looking Statements
 
This press release includes certain statements relating to future events and our intentions, beliefs, expectations, and predictions for the future which are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you that the forward-looking information presented in this press release is not a guarantee of future events or results, and that actual events or results may differ materially from those made in or suggested by the forward-looking information contained in this press release. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “plan,” “seek,” “comfortable with,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” or the negative thereof or variations thereon or similar terminology. Any forward-looking information presented herein is made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

###

Univar Inc.
Condensed Consolidated Statements of Operations
(Unaudited)

	
																	
 	 	Three months ended
June 30,	 	Six months ended
June 30,	
(in millions, except per share data)	 	2018	 	2017	 	2018	 	2017	
Net sales	 	$	2,372.6		 	$	2,247.0		 	$	4,530.6		 	$	4,245.8		
Cost of goods sold	 	1,872.1		 	1,780.6		 	3,543.5		 	3,340.0		
Gross profit	 	$	500.5		 	$	466.4		 	$	987.1		 	$	905.8		
Operating expenses:	 	 	 	 	 	 	 	 	
Outbound freight and handling	 	86.5		 	71.9		 	165.8		 	142.9		
Warehousing, selling and administrative	 	240.9		 	236.0		 	481.9		 	464.5		
Other operating expenses, net	 	11.0		 	24.2		 	24.6		 	44.0		
Depreciation	 	30.9		 	34.1		 	62.3		 	70.0		
Amortization	 	13.8		 	16.5		 	27.2		 	33.2		
Total operating expenses	 	$	383.1		 	$	382.7		 	$	761.8		 	$	754.6		
Operating income	 	$	117.4		 	$	83.7		 	$	225.3		 	$	151.2		
Other (expense) income:	 	 	 	 	 	 	 	 	
Interest income	 	0.9		 	0.8		 	2.1		 	1.7		
Interest expense	 	(32.9	)	 	(36.6	)	 	(69.0	)	 	(73.3	)	
Loss on extinguishment of debt	 	—		 	—		 	—		 	(0.8	)	
Other (expense) income, net	 	(2.1	)	 	(9.3	)	 	0.5		 	(16.0	)	
Total other expense	 	$	(34.1	)	 	$	(45.1	)	 	$	(66.4	)	 	$	(88.4	)	
Income before income taxes	 	83.3		 	38.6		 	158.9		 	62.8		
Income tax expense	 	27.2		 	7.3		 	37.4		 	8.9		
Net income	 	$	56.1		 	$	31.3		 	$	121.5		 	$	53.9		
Income per common share:	 	 	 	 	 	 	 	 	
Basic	 	$	0.40		 	$	0.22		 	$	0.86		 	$	0.38		
Diluted	 	0.40		 	0.22		 	0.86		 	0.38		
Weighted average common shares outstanding:	 	 	 	 	 	 	 	 	
Basic	 	141.1		 	140.1		 	141.0		 	139.8		
Diluted	 	142.0		 	141.3		 	142.0		 	141.2		

Univar Inc.
Condensed Consolidated Balance Sheets
(Unaudited)

	
									
(in millions, except per share data)	 	June 30,
2018	 	December 31,
2017	
Assets	 	 	 	 	
Current assets:	 	 	 	 	
Cash and cash equivalents	 	$	128.6		 	$	467.0		
Trade accounts receivable, net	 	1,369.2		 	1,062.4		
Inventories	 	880.3		 	839.5		
Prepaid expenses and other current assets	 	179.9		 	149.6		
Total current assets	 	$	2,558.0		 	$	2,518.5		
Property, plant and equipment, net	 	964.2		 	1,003.0		
Goodwill	 	1,800.2		 	1,818.4		
Intangible assets, net	 	267.1		 	287.7		
Deferred tax assets	 	23.7		 	22.8		
Other assets	 	95.9		 	82.3		
Total assets	 	$	5,709.1		 	$	5,732.7		
Liabilities and stockholders’ equity	 	 	 	 	
Current liabilities:	 	 	 	 	
Short-term financing	 	$	8.2		 	$	13.4		
Trade accounts payable	 	1,127.3		 	941.7		
Current portion of long-term debt	 	79.6		 	62.0		
Accrued compensation	 	74.4		 	100.7		
Other accrued expenses	 	264.0		 	301.6		
Total current liabilities	 	$	1,553.5		 	$	1,419.4		
Long-term debt	 	2,590.1		 	2,820.0		
Pension and other postretirement benefit liabilities	 	246.5		 	257.1		
Deferred tax liabilities	 	49.2		 	35.4		
Other long-term liabilities	 	98.8		 	110.7		
Total liabilities	 	$	4,538.1		 	$	4,642.6		
Stockholders’ equity:	 	 	 	 	
Preferred stock, 200.0 million shares authorized at $0.01 par value with no shares issued or outstanding as of June 30, 2018 and December 31, 2017	 	$	—		 	$	—		
Common stock, 2.0 billion shares authorized at $0.01 par value with 141.4 million and 141.1 million shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively	 	1.4		 	1.4		
Additional paid-in capital	 	2,313.4		 	2,301.3		
Accumulated deficit	 	(812.3	)	 	(934.1	)	
Accumulated other comprehensive loss	 	(331.5	)	 	(278.5	)	
Total stockholders’ equity	 	$	1,171.0		 	$	1,090.1		
Total liabilities and stockholders’ equity	 	$	5,709.1		 	$	5,732.7		

Univar Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)

																	
 	 	Three months ended
June 30,	 	Six months ended
June 30,	
(in millions)	 	2018	 	2017	 	2018	 	2017	
Operating activities:	 	 	 	 	 	 	 	 	
Net income	 	$	56.1		 	$	31.3		 	$	121.5		 	$	53.9		
Adjustments to reconcile net income to net cash provided (used) by operating activities:	 	 	 	 	 	 	 	 	
Depreciation and amortization	 	44.7		 	50.6		 	89.5		 	103.2		
Amortization of deferred financing fees and debt discount	 	1.9		 	1.9		 	3.9		 	3.9		
Amortization of pension credit from accumulated other comprehensive loss	 	0.1		 	(0.1	)	 	0.1		 	(0.1	)	
Loss on extinguishment of debt	 	—		 	—		 	—		 	0.8		
Deferred income taxes	 	8.0		 	(2.0	)	 	5.0		 	(5.3	)	
Stock-based compensation expense	 	4.3		 	5.1		 	13.7		 	11.5		
Other	 	0.7		 	0.2		 	1.1		 	0.7		
Changes in operating assets and liabilities:	 	 	 	 	 	 	 	 	
Trade accounts receivable, net	 	(110.8	)	 	(179.2	)	 	(330.2	)	 	(321.6	)	
Inventories	 	28.5		 	28.5		 	(51.6	)	 	(37.9	)	
Prepaid expenses and other current assets	 	(11.0	)	 	5.7		 	(25.1	)	 	(13.2	)	
Trade accounts payable	 	139.2		 	172.5		 	206.5		 	252.4		
Pensions and other postretirement benefit liabilities	 	(11.7	)	 	(10.2	)	 	(23.3	)	 	(19.2	)	
Other, net	 	(60.0	)	 	(39.7	)	 	(60.1	)	 	(41.6	)	
Net cash provided (used) by operating activities	 	$	90.0		 	$	64.6		 	$	(49.0	)	 	$	(12.5	)	
Investing activities:	 	 	 	 	 	 	 	 	
Purchases of property, plant and equipment	 	$	(28.9	)	 	$	(17.7	)	 	$	(45.1	)	 	$	(38.6	)	
Purchases of businesses, net of cash acquired	 	(11.5	)	 	—		 	(20.4	)	 	(0.5	)	
Proceeds from sale of property, plant, and equipment	 	0.3		 	—		 	2.5		 	—		
Other	 	—		 	1.3		 	—		 	1.0		
Net cash used by investing activities	 	$	(40.1	)	 	$	(16.4	)	 	$	(63.0	)	 	$	(38.1	)	
Financing activities:	 	 	 	 	 	 	 	 	
Proceeds from issuance of long-term debt	 	$	204.1		 	$	(10.0	)	 	$	345.9		 	$	2,254.0		
Payments on long-term debt and capital lease obligations	 	(233.4	)	 	(26.5	)	 	(553.5	)	 	(2,238.0	)	
Short-term financing, net	 	3.2		 	(6.7	)	 	(3.4	)	 	(11.9	)	
Financing fees paid	 	—		 	—		 	—		 	(4.4	)	
Taxes paid related to net share settlements of stock-based compensation awards	 	(0.5	)	 	(1.5	)	 	(3.2	)	 	(7.5	)	
Stock option exercises	 	0.3		 	4.3		 	1.1		 	28.1		
Contingent consideration payments	 	—		 	—		 	—		 	(3.2	)	
Other	 	0.6		 	0.5		 	0.6		 	0.5		
Net cash (used) provided by financing activities	 	$	(25.7	)	 	$	(39.9	)	 	$	(212.5	)	 	$	17.6		
Effect of exchange rate changes on cash and cash equivalents	 	$	(11.5	)	 	$	12.9		 	$	(13.9	)	 	$	18.4		
Net increase (decrease) in cash and cash equivalents	 	12.7		 	21.2		 	(338.4	)	 	(14.6	)	
Cash and cash equivalents at beginning of period	 	115.9		 	300.6		 	467.0		 	336.4		
Cash and cash equivalents at end of period	 	$	128.6		 	$	321.8		 	$	128.6		 	$	321.8		

Schedule A
Univar Inc.
Reconciliation of Adjusted EBITDA to Reported Net Income
(Unaudited)

	
																									
(in millions)	 	USA	 	Canada	 	EMEA	 	Rest of
World	 	Other/
Eliminations	 	Consolidated	
Three Months Ended June 30, 2018	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales:	 	 	 	 	 	 	 	 	 	 	 	 	
External customers	 	$	1,309.8		 	$	450.9		 	$	511.9		 	$	100.0		 	$	—		 	$	2,372.6		
Inter-segment	 	37.9		 	2.2		 	1.2		 	—		 	(41.3	)	 	—		
Total net sales	 	$	1,347.7		 	$	453.1		 	$	513.1		 	$	100.0		 	$	(41.3	)	 	$	2,372.6		
Cost of goods sold	 	1,056.9		 	384.2		 	394.9		 	77.4		 	(41.3	)	 	1,872.1		
Gross profit	 	$	290.8		 	$	68.9		 	$	118.2		 	$	22.6		 	$	—		 	$	500.5		
Outbound freight and handling	 	56.7		 	12.0		 	15.8		 	2.0		 	—		 	86.5		
Warehousing, selling and administrative	 	136.9		 	22.3		 	62.3		 	11.5		 	7.9		 	240.9		
Adjusted EBITDA	 	$	97.2		 	$	34.6		 	$	40.1		 	$	9.1		 	$	(7.9	)	 	$	173.1		
Other operating expenses, net	 	 	 	 	 	 	 	 	 	 	 	11.0		
Depreciation	 	 	 	 	 	 	 	 	 	 	 	30.9		
Amortization	 	 	 	 	 	 	 	 	 	 	 	13.8		
Interest expense, net	 	 	 	 	 	 	 	 	 	 	 	32.0		
Other expense, net	 	 	 	 	 	 	 	 	 	 	 	2.1		
Income tax expense	 	 	 	 	 	 	 	 	 	 	 	27.2		
Net income	 	 	 	 	 	 	 	 	 	 	 	$	56.1		
Total assets	 	$	3,310.1		 	$	1,758.6		 	$	1,017.3		 	$	220.6		 	$	(597.5	)	 	$	5,709.1		

																									
(in millions)	 	USA	 	Canada	 	EMEA	 	Rest of
World	 	Other/
Eliminations	 	Consolidated	
Three Months Ended June 30, 2017	 	 	 	 	 	 	 	 	 	 	 	 	
Net sales:	 	 	 	 	 	 	 	 	 	 	 	 	
External customers	 	$	1,191.1		 	$	492.4		 	$	463.7		 	$	99.8		 	$	—		 	$	2,247.0		
Inter-segment	 	35.0		 	2.3		 	1.2		 	0.2		 	(38.7	)	 	—		
Total net sales	 	$	1,226.1		 	$	494.7		 	$	464.9		 	$	100.0		 	$	(38.7	)	 	$	2,247.0		
Cost of goods sold	 	950.4		 	427.2		 	360.2		 	81.5		 	(38.7	)	 	1,780.6		
Gross profit	 	$	275.7		 	$	67.5		 	$	104.7		 	$	18.5		 	$	—		 	$	466.4		
Outbound freight and handling	 	47.3		 	9.2		 	13.8		 	1.6		 	—		 	71.9		
Warehousing, selling and administrative	 	136.6		 	21.8		 	56.7		 	12.0		 	8.9		 	236.0		
Adjusted EBITDA	 	$	91.8		 	$	36.5		 	$	34.2		 	$	4.9		 	$	(8.9	)	 	$	158.5		
Other operating expenses, net	 	 	 	 	 	 	 	 	 	 	 	24.2		
Depreciation	 	 	 	 	 	 	 	 	 	 	 	34.1		
Amortization	 	 	 	 	 	 	 	 	 	 	 	16.5		
Interest expense, net	 	 	 	 	 	 	 	 	 	 	 	35.8		
Other expense, net	 	 	 	 	 	 	 	 	 	 	 	9.3		
Income tax expense	 	 	 	 	 	 	 	 	 	 	 	7.3		
Net income	 	 	 	 	 	 	 	 	 	 	 	$	31.3		
Total assets	 	$	3,643.1		 	$	2,129.5		 	$	972.2		 	$	223.7		 	$	(1,161.6	)	 	$	5,806.9		

Schedule B
Univar Inc.
Other operating expenses, net
(Unaudited)

																	
 	 	Three months ended
June 30,	 	Six months ended
June 30,	
(in millions)	 	2018	 	2017	 	2018	 	2017	
Stock-based compensation expense	 	$	4.3		 	$	5.1		 	$	13.7		 	$	11.5		
Restructuring charges	 	—		 	1.8		 	0.5		 	3.5		
Other employee termination costs	 	4.4		 	1.4		 	6.8		 	3.1		
Business transformation costs	 	—		 	11.5		 	—		 	20.6		
Acquisition and integration related expenses	 	1.0		 	0.5		 	1.4		 	0.7		
Other	 	1.3		 	3.9		 	2.2		 	4.6		
Total other operating expenses, net	 	$	11.0		 	$	24.2		 	$	24.6		 	$	44.0		

Schedule C
Univar Inc.
Other (expense) income, net
(Unaudited)

																	
 	 	Three months ended
June 30,	 	Six months ended
June 30,	
(in millions)	 	2018	 	2017	 	2018	 	2017	
Foreign currency transactions	 	$	(4.2	)	 	$	(1.8	)	 	$	(4.3	)	 	$	(3.9	)	
Foreign currency denominated loans revaluation	 	(2.6	)	 	(5.4	)	 	(1.4	)	 	(8.4	)	
Undesignated foreign currency derivative instruments	 	2.2		 	1.2		 	0.9		 	2.2		
Undesignated interest rate swap contracts	 	—		 	(4.8	)	 	—		 	(4.8	)	
Debt amendment costs	 	—		 	—		 	—		 	(4.2	)	
Non-operating retirement benefits	 	3.4		 	2.4		 	6.9		 	4.8		
Other	 	(0.9	)	 	(0.9	)	 	(1.6	)	 	(1.7	)	
Total other (expense) income, net	 	$	(2.1	)	 	$	(9.3	)	 	$	0.5		 	$	(16.0	)	

Schedule D
Univar Inc.
GAAP Net Income to Adjusted Net Income and Adjusted EBITDA Tabular reconciliations
(Unaudited)

																																	
 	 	Three months ended
June 30,	 	Six months ended
June 30,	
 	 	2018	 	2017	 	2018	 	2017	
(in millions, except per share data)	 	Amount (2)	 	per share (1)(2)	 	Amount (2)	 	per share (1)(2)	 	Amount (2)	 	per share (1)(2)	 	Amount (2)	 	per share (1)(2)	
Net income	 	$	56.1		 	$	0.40		 	$	31.3		 	$	0.22		 	$	121.5		 	$	0.86		 	$	53.9		 	$	0.38		
Exchange loss (3)	 	6.8		 	0.05		 	7.2		 	0.05		 	5.7		 	0.04		 	12.3		 	0.09		
Derivative (gain) loss (3)	 	(2.2	)	 	(0.02	)	 	3.6		 	0.03		 	(0.9	)	 	(0.01	)	 	2.6		 	0.02		
Transformation costs (3)	 	—		 	—		 	11.5		 	0.09		 	—		 	—		 	20.6		 	0.15		
Restructuring charges (3)	 	—		 	—		 	1.8		 	0.01		 	0.5		 	—		 	3.5		 	0.02		
Other employee termination costs (3)	 	4.4		 	0.03		 	1.4		 	0.01		 	6.8		 	0.05		 	3.1		 	0.02		
Debt amendment costs (3)	 	—		 	—		 	—		 	—		 	—		 	—		 	4.2		 	0.03		
Loss on extinguishment of debt	 	—		 	—		 	—		 	—		 	—		 	—		 	0.8		 	0.01		
Acquisition and integration related costs (3)	 	1.0		 	0.01		 	0.5		 	—		 	1.4		 	0.01		 	0.7		 	—		
Other (3)	 	2.2		 	0.02		 	4.8		 	0.04		 	3.8		 	0.03		 	6.3		 	0.04		
Benefit from income taxes related to reconciling items (4)	 	(3.6	)	 	(0.02	)	 	(5.0	)	 	(0.05	)	 	(4.9	)	 	(0.03	)	 	(10.1	)	 	(0.07	)	
Other non-recurring tax items (4)	 	1.0		 	—		 	—		 	—		 	(8.0	)	 	(0.06	)	 	—		 	—		
Adjusted net income	 	$	65.7		 	$	0.47		 	$	57.1		 	$	0.40		 	$	125.9		 	$	0.89		 	$	97.9		 	$	0.69		
Stock-based compensation expense	 	4.3		 	 	 	5.1		 	 	 	13.7		 	 	 	11.5		 	 	
Non-operating retirement benefits (5)	 	(3.4	)	 	 	 	(2.4	)	 	 	 	(6.9	)	 	 	 	(4.8	)	 	 	
Interest expense, net	 	32.0		 	 	 	35.8		 	 	 	66.9		 	 	 	71.6		 	 	
Depreciation	 	30.9		 	 	 	34.1		 	 	 	62.3		 	 	 	70.0		 	 	
Amortization	 	13.8		 	 	 	16.5		 	 	 	27.2		 	 	 	33.2		 	 	
All remaining provision for income taxes (4)	 	29.8		 	 	 	12.3		 	 	 	50.3		 	 	 	19.0		 	 	
Adjusted EBITDA	 	$	173.1		 	 	 	$	158.5		 	 	 	$	339.4		 	 	 	$	298.4		 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Weighted average common shares outstanding:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic	 	141.1		 	 	 	140.1		 	 	 	141.0		 	 	 	139.8		 	 	
Diluted (6)	 	142.0		 	 	 	141.3		 	 	 	142.0		 	 	 	141.2		 	 	

	

(1)	Calculation based on dilutive share count.	
		
(2)	The quarter-to-date period is calculated so the sum of quarterly amounts equals the year-to-date period. Immaterial differences may exist due to rounding.	
		
(3)	Reconciling items represent items disclosed in Schedule B and Schedule C included in this document, excluding stock-based compensation and non-operating retirement benefits.	
		
(4)	Total benefit from income taxes reconciles to the amount reported in the Condensed Consolidated Statement of Operations for each respective period. Tax on reconciling items is calculated using the effective tax rate adjusted for significant non-recurring tax items.	
		
(5)	Includes the non-operating retirement benefit items currently disclosed in Schedule C. These items were previously reported in warehouse, selling and administrative (operating expenses) that have moved to other income (expense), net as part of the adoption of the FASB retirement benefits accounting pronouncement.	
		
(6)	Diluted earnings per share is calculated using net income (loss) or adjusted net income (loss) available to common shareholders divided by diluted weighted average shares outstanding during each period, which includes unvested restricted shares. Diluted earnings per share considers the impact of potential dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares would have an anti-dilutive effect.	

Second Quarter 2018 Earnings Call August 1, 2018

 

Forward-Looking Statements This presentation includes certain statements relating to future events and our intentions, beliefs, expectations, and predictions for the future which are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. We caution you that the forward-looking information presented in this presentation is not a guarantee of future events or results, and that actual events or results may differ materially from those made in or suggested by the forward-looking information contained in this presentation. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as "outlook," "guidance," “may,” “plan,” “seek,” “comfortable with,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” or the negatives or variations of these terms. Forward-looking information contained in this presentation is made only as of the date of this presentation, and we do not undertake any obligation to update or revise any forward- looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise. Regulation G: Non-GAAP Measures The information presented herein regarding certain unaudited non-GAAP measures does not conform to generally accepted accounting principles in the United States (U.S. GAAP) and should not be construed as an alternative to the reported results determined in accordance with U.S. GAAP. Univar has included this non- GAAP information to assist in understanding the operating performance of the company and its operating segments. The non-GAAP information provided may not be consistent with the methodologies used by other companies. All non-GAAP information related to previous Univar filings with the SEC has been reconciled with reported U.S. GAAP results. 2

 

Second Quarter 2018 Highlights Solid performance; momentum building Q2 GAAP EPS(1) $0.40 vs. $0.22 prior year Ÿ Reported net income rose 79.2% to $56.1 million vs. $31.3 million in the prior year Q2 Adjusted EPS(1)(2) $0.47 vs. $0.40 prior year Ÿ Adjusted EPS growth of 18% Ÿ Reported adjusted net income of $65.7 million vs. $57.1 million in the prior year Q2 Adjusted EBITDA(1) $173.1 million vs. $158.5 million in 2017 Ÿ 9% Adjusted EBITDA growth driven by execution and mix enrichment Ÿ Healthy performance of the core business Ÿ Sales force execution and strong operating leverage helping to drive improved results Adjusted Operating Cash Flow(1)(3) $201.1 million vs. $162.6 million in 2017 Ÿ Reflects higher Adjusted EBITDA performance and improvement in working capital levels (1) Variances to Q2 2017. (2) Adjusted Net Income / Diluted Weighted Average Shares Outstanding. Adjusted net income excludes the same items as Adjusted EBITDA, except for stock-based compensation expense and non-operating retirement benefits. (3) Adjusted EBITDA plus cash flows from changes in accounts receivable, inventory, and accounts payable, less capital expenditures. 3

 

Balance Sheet Highlights Deleveraging on-track LTM ended June 30, ($ in millions) 2018 2017 Y/Y Net Debt (1) $2,549.4 $2,692.4 ($143.0) Leverage (2) 4.0x 4.7x (0.7x) Interest Coverage (3) 4.9x 4.1x 0.8x Return on Assets Deployed (4) 24.4% 21.0% 340 bps (1) Net Debt defined as Total Debt (Long term debt, inclusive of debt discount and unamortized debt issuance costs, plus short term financing) less cash and cash equivalents. (2) Net Debt divided by last 12 months (LTM) of Adjusted EBITDA. (3) Interest coverage defined as LTM Adjusted EBITDA / LTM Cash Interest (net of interest income). (4) LTM Earnings before Interest, Taxes and Amortization (EBITA) divided by trailing 13 month average of net PP&E plus net working capital (accounts receivable plus inventory less accounts payable). 4

 

Univar – Consolidated Highlights Execution and healthy ($ in millions) KEY METRICS markets drive Three months ended 2018 2017 Y/Y profitability gains June 30, • Solid growth in Gross Profit and Net Sales $2,372.6 $2,247.0 5.6% Adjusted EBITDA Currency Neutral -- -- 3.6% • Higher margins and conversion ratio Gross Profit $500.5 $466.4 7.3% Currency Neutral -- -- 5.4% Gross Margin 21.1% 20.8% +30 bps Adjusted EBITDA $173.1 $158.5 9.2% Currency Neutral -- -- 7.3% Adjusted EBITDA Margin 7.3% 7.1% +20 bps Conversion Ratio (1) 34.6% 34.0% +60 bps (1) Conversion Ratio defined as Adjusted EBITDA / Gross Profit. 5

 

USA – Highlights USA transformation gains ($ in millions) KEY METRICS traction Three months ended 2018 2017 Y/Y • Sales force execution improving June 30, • Capturing higher freight costs Net Sales $1,309.8 $1,191.1 10.0% • Product mix impact on margins Gross Profit $290.8 $275.7 5.5% Gross Margin 22.2% 23.1% -90 bps Adjusted EBITDA $97.2 $91.8 5.9% Adjusted EBITDA Margin 7.4% 7.7% -30 bps 6

 

CANADA – Highlights Strength in Industrial ($ in millions) KEY METRICS Chemicals offset by Three months ended 2018 2017 Y/Y weakness in Ag June 30, • Strength in Coatings and Personal Care Net Sales $450.9 $492.4 (8.4)% growth markets Currency Neutral -- -- (12.1)% • Double-digit Adjusted EBITDA growth in Industrial Chemicals Gross Profit $68.9 $67.5 2.1% • Weather-related drop in Ag market Currency Neutral -- -- (1.9)% demand Gross Margin 15.3% 13.7% +160 bps Adjusted EBITDA $34.6 $36.5 (5.2)% Currency Neutral -- -- (8.8)% Adjusted EBITDA Margin 7.7% 7.4% +30 bps 7

 

EMEA – Highlights Strong growth continues ($ in millions) KEY METRICS • Gains in Focused Industries and Three months ended 2018 2017 Y/Y favorable mix drive 17% Adjusted June 30, EBITDA growth Net Sales $511.9 $463.7 10.4% • Gross profit margin, Adjusted EBITDA margin, and conversion ratio rise Currency Neutral -- -- 3.7% • Sales force execution continues to Gross Profit $118.2 $104.7 12.9% improve Currency Neutral -- -- 5.7% Gross Margin 23.1% 22.6% +50 bps Adjusted EBITDA $40.1 $34.2 17.3% Currency Neutral -- -- 10.5% Adjusted EBITDA Margin 7.8% 7.4% +40 bps 8

 

REST OF WORLD – Highlights Mix improvement & ($ in millions) KEY METRICS productivity gains Three months ended 2018 2017 Y/Y • Strength in Specialty Personal Care June 30, market in Brazil Net Sales $100.0 $99.8 0.2% • Mexico margin management and cost Currency Neutral -- -- 5.4% productivity gains • Contributions from the Tagma Gross Profit $22.6 $18.5 22.2% acquisition Currency Neutral -- -- 30.3% Gross Margin 22.6% 18.5% +410 bps Adjusted EBITDA $9.1 $4.9 85.7% Currency Neutral -- -- 98.0% Adjusted EBITDA Margin 9.1% 4.9% +420 bps 9

 

Cash Flow Highlights Three months ended June 30, ($ in millions) 2018 2017 Y/Y Adjusted Operating Cash Flow (1) $201.1 $162.6 23.7 % Net Working Capital $56.9 $21.8 161.0 % Capital Expenditures (2) ($28.9) ($17.7) 63.3 % Cash Taxes ($22.9) ($6.9) 231.9 % Cash Interest (net) ($24.3) ($24.8) (2.0)% Pension Contribution ($9.0) ($8.2) 9.8 % Acquisitions ($11.5) $— NM (1) Adjusted Operating Cash Flow equals Adjusted EBITDA plus cash flows from changes in trade accounts receivable, inventory, and trade accounts payable, less capital expenditures. (2) Excludes additions from capital leases. 10

 

OUTLOOK EXPECTATIONS Q3 2018 & Full Year 2018 2018 Full Year 2018 Advance Commercial Greatness, Adjusted EBITDA Operational Excellence and One Univar Low double digit % growth initiatives versus 2017 (1) Selective commercial and technology investments Q3 2018 Strategic, selective and disciplined Adjusted EBITDA acquisition approach Low double digit % growth versus Q3 2017 (2) Continue to de-leverage the balance sheet Transformation into a growth company (1) Assumes growth of 2017 Adjusted EBITDA of $603.7 million, restated for the adoption of the FASB retirement benefits pronouncement or $593.8 million. (2) Assumes growth of Q3 17 Adjusted EBITDA of $152.0 million, restated for the adoption of the FASB retirement benefits pronouncement or $149.3 million. 11

 

Full-Year 2018 Guidance Year ended December 31, ($ in millions, except per share data) 2018 2017 Adjusted EPS $1.65 - 1.85 $1.39 low double digit Adjusted EBITDA $593.8 (1) % growth Cash Interest (net) ~($125) ($136.3) Tax Rate on Adjusted EPS ~30% 16.3% Pension Contribution ~($42) ($38.2) Change in Net Working Capital ~($50 - 100) ($52.6) Capital Expenditures ~($115) ($82.7) Debt Amortization ~($17) ($89.2) (1) Restated to reflect the adoption of the FASB retirement benefits pronouncement. Note: Cash inflow +/ Cash outflow - 12

 

Appendix A - Q2 2018 Adjusted Net Income and Adjusted EBITDA Reconciliation Three months ended June 30, 2018 2017 ($ in millions, except per share data) Amount per share (1) Amount per share (1) Net income $56.1 $0.40 $31.3 $0.22 Other operating expenses, net (excluding $6.7 $0.05 $19.1 $0.14 stock-based compensation) Other income (expense), net (excluding $5.5 $0.04 $11.7 $0.09 non-operating retirement benefits) Benefit from income taxes related to ($3.6 ) ($0.02 ) ($5.0 ) ($0.05 ) reconciling items Other non-recurring tax items $1.0 $— $— $— Adjusted net income $65.7 $0.47 $57.1 $0.40 Stock-based compensation expense $4.3 $5.1 Non-operating retirement benefits ($3.4 ) ($2.4 ) Interest expense, net $32.0 $35.8 Depreciation and amortization $44.7 $50.6 All remaining provision for income taxes $29.8 $12.3 Adjusted EBITDA $173.1 $158.5 (1) Immaterial differences may exist in summation of per share amounts due to rounding. 13

 

Appendix B - Adjusted Operating Cash Flow Three months ended June 30, ($ in millions) 2018 2017 Adjusted EBITDA $173.1 $158.5 Change in: Trade accounts receivable, net ($110.8) ($179.2) Inventories $28.5 $28.5 Trade accounts payable $139.2 $172.5 Capital expenditures ($28.9) ($17.7) Adjusted operating cash flow $201.1 $162.6 14